‘Don’t think you have to do the same thing for your whole life’

Managing debt. That's what much of Phil Baldwin's career has been about — as an accountant, banker and current CEO of CredAbility, the Atlanta-based non-profit that gave credit counseling advice to nearly 300,000 consumers across the country last year.

During his career, Baldwin, 54, has wrestled with the effects of rural poverty in Arkansas as head of a bank charged with improving access to capital for farmers, entrepreneurs and low-income consumers. Now, he’s trying to lead CredAbility — known for helping consumers chip away at their debt loads — in a new direction as the economy improves and the demand for credit counseling declines.

Baldwin wants CredAbility to start giving financial planning advice to the low- and moderate-income consumers generally neglected by traditional for-profit firms. He talks about that effort, as well as what he’s learned during his three decades in the financial world.

Q: Early in your career, you were entrusted with access to a lot of money while working as an accountant for a wealthy Arkansas entrepreneur, Frank D. Hickingbotham, who founded the TCBY yogurt chain. Would you please discuss?

A: He had several houses around the country and traveled a lot. He would leave me with his checkbook with $80 million to $90 million of availability in signed checks.

He took me to lunch when he gave me the checkbook and said, “The only people who will ever steal from you are those who you trust, because if you don’t trust someone you won’t give them the opportunity. You’ll keep your assets segregagted.” Then he handed me the checkbook.

What he was saying is that I trust you. Don’t disappoint me. I always remembered that.

I kept that checkbook in the safe. I was afraid someone might get a hold of it. I probably would have died protecting it.

Q: Later on, while working in corporate finance for Dillard’s, you had a disagreement that led you to change your career path. Would you please discuss?

A: I was having an argument with our attorney over a couple of sentences in an SEC disclosure. I went home and told my wife, "Only CPAs and lawyers can love this stuff. I don't really want to be known as the guy who got the 10-K exactly right and have that on my tombstone. There's got to be more than that."

Probably two weeks later, I got a call from the CEO of Southern Bancorp in Arkansas. They were looking for a chief financial officer who would then possibly become CEO. It’s a community development bank — a bank with a social mission. The mission was to bring access to capital to rural Arkansas. A lot of folks are low-income and they have a hard time getting approved for a loan.

Our bank, owned by large foundations, tried to do something different. We’re a normal bank with a non-profit arm. We would be more flexible on our loan underwriting.

I saw up close and personal the challenges that low-income families have doing things we take for granted. I was in the bank one day and there was a gentleman there who was trying to get a loan from us to get his daughter a prom dress. He didn’t have the cash and he knew he couldn’t get a loan somewhere else.

Our bankers couldn’t make him the loan because of his very low credit score. When I walked out of the bank, he was sitting in the parking lot crying. I walked him back in there and said we were going to make him the loan out of the non-profit.

That stuff affects me. I don’t know how you can’t be affected by that. He probably never paid us back because he couldn’t.

Q: After 10 years of heading the for-profit/non-profit bank, you decided to put both feet in the non-profit world by leading CredAbility. Would you please discuss?

A: We're the tip of the spear. When people get in financial trouble, they call us for help. The first thing I did when I got here was to go up to our call center and listen to the counselors.

My daughter is 24. I sat in on a phone session with a young lady about my daughter’s age, so it connected with me. She had had an abusive relationship in her home life and had left. Now she’s out all by herself and she’s starting to go to a community college to get her future in order, and she’s charged up a bunch of stuff on credit cards.

I can just envision this girl out there by herself struggling. You could just tell this was the most important call in her life. Her voice was quivering. You could here the fear on her end of the phone.

We couldn’t change her situation in a one-hour call. But halfway through it, she began to see she had options. We made a difference in her life.

Q: Ever since that watershed dispute with the Dillard’s attorney, making a difference seems to have driven your career decisions. Do you have any advice for people thinking about switching careers?

A: As I look back on it, I think I made a change about every 10 years. I don't think I did that intentionally, but I liked it.

In fact, I talk to my children about that now. Don’t think you have to do the same thing for your whole life. It’s OK if that is your passion. But if you want to make a change, do it.

Every time I made a change there was a nervousness because I was stepping into the unknown. But there was also a spring in my step because I was doing something different. I think it’s useful to test yourself. Can I do this?

But you want to be careful. You just don’t want to wake up one morning and say I want to change my life. We all have responsibilities.

But there’s great satisfaction in making a change — especially if it’s something your passionate about and that’s meaningful beyond just making money.

Q: Right now, you’re attempting to make a substantial change at CredAbility. Would you please discuss?

A: Coming from my world in banking and seeing the challenges people face in navigating their financial lives, I believe there's a tremendous need for financial advisory services for low-and moderate-income families. They don't have access to the financial advisers like Goldman Sachs and Merrill Lynch because they don't have large assets to manage.

I think CredAbility has an opportunity to step into that role. Right now, the counselors are focused on crisis activities like helping people avoid foreclosure. We would move from the emergency room to a longer term relationship, such as managing cash flow, looking at ways to increase disposable income, raising credit scores, improving net worth and estate planning. We would help people establish short-term and long-term goals.

We’ve got a $1 million grant from the Goizueta Foundation to pilot this project in the Hispanic community in Atlanta to see the best way it would work. We believe that this type of high-quality financial planning service for struggling low- and moderate-income families has not been done in this country. We spent the last year looking for examples. This group is not being served.